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ARCHIVED - 2008 Purchasing Activity Report

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Introduction

Each year the Government
publishes, on the Internet, statistics on purchases and contracts conducted in
departments and agencies. The annual Purchasing Activity Report is used to
provide statistical analysis of the processes and tools through which
government contracting is conducted.

In reviewing the
statistics it must be kept in mind that the federal Government's Contracting
Policy objective is to acquire goods and services and to carry out construction
in a manner that enhances access, competition and fairness and results in best
value or, if appropriate, the optimal balance of overall benefits to the Crown
and the Canadian people.

As well, contracting is to
be conducted in a manner that will:

Stand the test of public scrutiny in matters of prudence, probity,
facilitate access, encourage competition and reflect fairness in the spending
of public funds;

Ensure the pre-eminence of operational requirements;

Support long-term industrial and regional development and other
appropriate national objectives.

Comply with the government's obligations under the
North American Free Trade Agreement,
the World Trade Organization – Agreement
on Government Procurement, and the
Agreement on Internal Trade

The Government is
committed to working on strengthening and modernising government procurement,
and to ensure greater transparency, accountability, fiscal responsibility, and
ethical conduct in government.

In keeping with these
overall objectives, on March 23, 2004, the Government announced a new policy on the mandatory publication of contracts over $10,000. The published lists of
contracts and contract amendments in the proactive disclosure pages on various
departmental web sites are accessible from this
Treasury Board Secretariat web
site.

On April 11, 2006, the
Government of Canada introduced the Federal Accountability Action Plan, which
contains specific measures to help strengthen accountability and increase
transparency and oversight in government operations, including procurement.

The Government is also
committed to ensuring that Canadians are provided with appropriate information
on activities in a cost-effective, efficient and transparent manner. Suppliers
who wish to find out more about doing business with the federal government
should consult Canada's Electronic Tendering Service at http://www.merx.com.
Those who wish to find out more about the inter-departmental initiative to
improve supplier and buyer awareness and simplify access to federal government
purchasing information should go to the Business Access Canada (formerly Contracts Canada) web site at http://contractscanada.gc.ca/en/index.html.

2008 Purchasing Activity Report - Summary

Departments and Agencies subject to Government Contracts Regulations

Total Number and Value of Contracts including Net Amendments

Contract Type

Solicitation Procedure

Number

% of Total Number

Value
$ 000

% of Total Value

Goods

Contracts below $25,000, including amendments

177,949

414,540

Electronic bidding (Note 2.3 & 5)

2,736

3,551,259

Traditional competitive (Note 2.3 & 5)

992

948,421

ACANs (Note 2.3 & 5)

592

558,436

Competitive awards (Note 2.3)

4,320

5,058,116

Net amendments

-

1,179,843

Competitive including amendments

4,320

69.5%

6,237,959

74.2%

Non-competitive awards (Note 2.3)

1,896

1,920,770

Net amendments

-

243,890

Non-Competitive including amendments

1,896

30.5%

2,164,660

25.8%

Subtotal Contracts $25,000 and above

6,216

100.0%

8,402,619

100.0%

Total of All Goods Contracts

184,165

8,817,159

Proportion of All Contracts

53.9%

53.6%

Services

Contracts below $25,000, including amendments

128,641

630,951

Electronic bidding

3,843

1,875,928

Traditional competitive

5,626

1,118,710

ACANs

661

256,566

Competitive awards

10,130

3,251,204

Net amendments

-

2,242,840

Competitive including amendments

10,130

84.5%

5,494,044

89.6%

Non-competitive awards

1,853

441,345

Net amendments

-

195,495

Non-Competitive including amendments

1,853

15.5%

636,840

10.4%

Subtotal Contracts $25,000 and above

11,983

100.0%

6,130,884

100.0%

Total of All Service Contracts

140,624

6,761,835

Proportion of All Contracts

41.1%

41.1%

Construction

Contracts below $25,000, including amendments

15,170

61,362

Electronic bidding

828

516,589

Traditional competitive

908

133,995

ACANs

13

2,032

Competitive awards

1,749

652,616

Net amendments

-

131,148

Competitive including amendments

1,749

88.8%

783,764

98.1%

Non-competitive awards

221

14,343

Net amendments

-

708

Non-Competitive including amendments

221

11.2%

15,051

1.9%

Subtotal Contracts $25,000 and above

1,970

100.0%

798,815

100.0%

Total of All Construction Contracts

17,140

860,177

Proportion of All Contracts

5.0%

5.2%

All Contracts

Contracts below $25,000, including amendments

321,760

1,106,853

Electronic bidding

7,407

5,943,776

Traditional competitive

7,526

2,201,126

ACANs

1,266

817,034

Competitive awards

16,199

8,961,936

Net amendments

-

3,553,831

Competitive including amendments

16,199

80.3%

12,515,767

81.6%

Non-competitive awards

3,970

2,376,458

Net amendments

-

440,093

Non-Competitive including amendments

3,970

19.7%

2,816,551

18.4%

Subtotal Contracts $25,000 and above

20,169

15,332,318

Total Contract Awards including Net Amendments

341,929

16,439,171

Notes to 2008 Purchasing Activity Report

1. Objective

The objective of the
annual Purchasing Activity Report is to provide a basic snapshot of purchasing
activities of the Government of Canada. It is based on the Government of
Canada's policy framework in effect in 2008. It is important to note that there
is no statutory requirement for such a report. It complements information on
contracting statistics on Business Access Canada (formerly Contracts Canada)
web site at http://www.contractscanada.gc.ca/. Further information on
contracting and contracting activities may be found for major purchasing
departments in the Government's public and Parliamentary reporting documents,
specifically their Annual Report on Plans
and Priorities and Departmental
Performance Reports. Internal departmental audits on the
contracting function are posted on http://www.tbs-sct.gc.ca/rma/database/aeve_e.asp. Also, as
mentioned in the Introduction above, the published lists of contracts in the
proactive disclosure pages on various departmental web sites are accessible
from this Treasury Board Secretariat web site http://www.tbs-sct.gc.ca/pd-dp/gr-rg/index_e.asp

The Purchasing Activity
Report was derived from data provided by the reporting entities specified
below. Since the data is not audited, no warranty or other legal assurance as
to the truth, accuracy or completeness of any of this information is stated or
can be implied. Any person making use of this information for any purpose
whatsoever does so entirely at his/her own risk, and the Crown shall have no
liability whatsoever. This report covers government purchasing activities for
the period January to December 2008 inclusive.

2. Procurement Policy Framework

The main features of the
Government of Canada's procurement policy framework in effect in 2008 that are
relevant to the Purchasing Activity Report are as follows:

2.1 The objective of government procurement contracting is to acquire goods
and services and to carry out construction in a manner that enhances access,
competition and fairness and results in best value or, if appropriate, the
optimal balance of overall benefits to the Crown and the Canadian people.

2.2 Government contracting shall be conducted in a manner that will:

stand the test of public scrutiny in matters of prudence and probity,
facilitate access, encourage competition, and reflect fairness in the
spending of public funds;

ensure the pre-eminence of operational requirements;

support long-term industrial and regional development and other
appropriate national objectives, including aboriginal economic development;

comply with the
government's obligations under the North
American Free Trade Agreement, the World Trade Organization – Agreement on Government Procurement
and
the Agreement on Internal Trade.

2.3 Appendix A of the Treasury Board Contracting Policy defines a
competitive contract as a contract where the process used for the
solicitation of bids enhances access, competition and fairness and assures
that a reasonable and representative number of suppliers are given an
opportunity to bid by:

EITHER

giving public notice, using electronic bidding methodology, possibly
supplemented by traditional bidding procedures, of a call for bids for a
proposed contract or of an intention to award a contract to a pre-identified
contractor (a directed contract advertised by an Advance Contract Award
Notice – ACAN), in accordance with limited tendering reasons set out in the
trade agreements, or in accordance with the exceptions to bidding set out in
section 6 of the Government Contracts Regulations (GCRs)

and where

in the case of a call for bids, the lowest bid or the bid that offered
the best value, as set out in the evaluation criteria in the bid
solicitation and as determined by the contracting authority, was
accepted;

in the case of a call for bids where only one bid compliant with
mandatory criteria set out in the bid solicitation was received, fair
value to the Crown, as determined by the contracting authority, was
obtained; or

in the case of an ACAN, no valid statement of capabilities is received
within the fifteen calendar day posting period.

OR

giving public notice, using traditional bidding procedures (such as a
suppliers' list, etc.) and in a manner that is consistent with generally
accepted trade practices, of a call for bids for a proposed contract, and
where

in the case of a call for bids, the lowest bid or the bid that offered
best value, as set out in the evaluation criteria in the bid solicitation
and determined by the contracting authority, was accepted, or

in the case that only one bid compliant with the mandatory criteria set
out in the bid solicitation was received, fair value to the Crown, as
determined by the contracting authority, was obtained.

2.4 Section 6 of the Government Contracts Regulations
specifies that a contracting authority may enter into a contract without
soliciting bids where

the need is one of pressing emergency in which delay would be injurious
to the public interest;

the estimated expenditure does not exceed

$25,000,

$100,000, where the contract is for the acquisition of architectural,
engineering and other services required in respect of the planning,
design, preparation or supervision of the construction, repair,
renovation or restoration of a work, or

$100,000, where the contract is to be entered into by the member of
the Queen's Privy Council for Canada responsible for the Canadian
International Development Agency and is for the acquisition of
architectural, engineering or other services required in respect of the
planning, design, preparation or supervision of an international
development assistance program or project;

the nature of the work is such that it would not be in the public
interest to solicit bids; or

only one person is capable of performing the contract.

3. Reporting Entities

The reporting entities
targeted in the report are the contracting authorities, as defined in the Government Contracts Regulations and
the Financial Administration Act (FAA):

The appropriate Minister, as defined in paragraph (a), (a.1) or (b) of
the definition "appropriate Minister" in section 2 of the FAA, as follows:

(a) with respect to a department named in Schedule I, the Minister
presiding over the department,

(a.1) with respect to a division or branch of the federal public
administration set out in column I of Schedule I.1, the Minister set out in
column II of that Schedule,

(b) with respect to a commission under the Inquiries
Act, the Minister designated by order of the Governor in Council as
the appropriate Minister.

A departmental corporation named in Schedule II to the FAA, or

The National Capital Commission (listed in Schedule III).

In accordance with
subsection 41(2) of the Financial
Administration Act, the Government
Contracts Regulations do not apply to Canada Revenue Agency.
However, the agency has voluntarily provided data on its purchasing activity in
year 2008.

4 Exclusions under Government Contracts Regulations

The Government Contracts Regulations apply
to all contracts except

a contract entered into by the National Film Board;

a contract for the construction of buildings entered into under the Veterans' Land Act;

a contract entered into under the Indian Act
that involves Indian moneys as defined in that Act;

subject to section 4 of those Regulations, a contract for the performance
of legal services entered into by or under the authority of the Minister of
Justice,

a contract for the fit-up of an office or a residential accommodation where
the contract for fit-up is part of a transaction authorized pursuant to the Federal Real Property Act or the
regulations made there under; or

arrangements entered into under an Interchange Canada Agreement.

In addition, the Treasury
Board (TB) has given approval to exempt the Canadian Security Intelligence
Service and the Office of the Governor-General's Secretary from TB reporting
requirements.

5. Definition of Terms

The Government's
Contracting Policy includes a series of definitions that serve as the basis for
the categories found in the report.

Advance
contract award notice (ACAN)- An ACAN
allows departments and agencies to post a notice, for no fewer than 15 calendar
days, indicating to the supplier community that it intends to award a good,
service or construction contract to a pre-identified contractor. If no other
supplier submits, during the 15-calendar day posting period, a statement of
capabilities that meet the requirements set out in the ACAN, the competitive
requirements of the government's contracting policy have been met. Following
notification to suppliers not successful in demonstrating that their statement
of capabilities meets the requirements set out in the ACAN, the contract may
then be awarded using the Treasury Board's electronic bidding authorities. If
other potential suppliers submit statements of capabilities during the
15-calendar day posting period, and meet the requirements set out in the ACAN,
the department or agency must proceed to a full tendering process on either the
government's electronic tendering service or through traditional means, in
order to award the contract.

Electronic bidding – a
method of procurement that promotes suppliers' access to, and transparency in,
the procurement process and facilitates the Crown's receipt of best value, by
using:

public notice by means of an approved electronic information service of
procurement opportunities (e.g., MERX);

public notice by means of an electronic information service of proposed
directed procurements by means of an Advance Contract Award Notice (ACAN);

public notice in the "Government Business Opportunities" publication; or (d)
such other procurement methods as may be approved by the Treasury Board.

Traditional competitive –
a method of procurement that involves giving public notice, using traditional
bidding procedures and in a manner that is consistent with generally accepted
trade practices, of a call for bids for a proposed contract.

6. Amendments

In 2008, the total value
of positive amendments (i.e., those that result in an increase in the contract
value) was $4385.9 million. The total value of negative amendments (i.e., those
that result in a decrease in the contract value) was $336.2 million. The total
value of net amendments was $4049.7 million.

7. Acquisition Cards

The above data do not
include transactions using acquisition cards. Those cards are normally used for
low dollar value purchases. In 2008, there were 2.2 million acquisition card
transactions for a total value of $885.4 million.

8. Other Excluded Items

The data do not include
expenditures for travel, hotel accommodation, hospitality and petty cash.